WASHINGTON, May 28 /PRNewswire/ -- The American Farm Bureau Federation said the House "made a grave mistake" last night when it approved a budget plan containing President Clinton's Btu tax, contending it will create a much heavier tax burden for the nation's farmers and ranchers.
"The Clinton administration's Btu tax will hit rural residents especially hard," said AFBF President Dean Kleckner. "It was disappointing for us to watch the House vote to raise taxes without providing any long-term, fundamental spending restraint.
"It's now imperative that the Senate remedy this situation by adopting a budget plan that recognizes the need to rely on spending cuts rather than tax increases," Kleckner said.
Farm Bureau has already written to the Senate Finance Committee, urging consideration of the budget reconciliation plan offered by Sens. David Boren (D-Okla.), John Danforth (R-Mo.), J. Bennett Johnston (D-La.) and William Cohen (R-Maine). "It moves the budget debate in the right direction because it eliminates the Btu and barge taxes, imposes capital gains indexing and imposes greater spending restraint," Kleckner said.
Kleckner said the partial exemption from the energy tax for agriculture approved by the House is "insufficient" to offset the burden of indirect energy tax costs associated with agricultural production, particularly when the effects of the barge tax and loss of the ethanol exemption are considered. The House action to lower the tax rate on farm diesel and gasoline saves only $113 million of an expected $1 billion in increased farm costs.
Kleckner also noted: "In addition to the new energy taxes, farmers will be paying more for fuel storage costs on their farms as a result of the amendment to require the use of indelible dye in diesel fuel. While we support efforts to stop tax evasion, the dyed fuel requirement will mean farmers must construct separate storage tanks for tax-exempt diesel fuel. This is a new and significant cost to a farming operation."
Farm Bureau supports a spending freeze in all budget categories as an alternative to tax increases. "A spending freeze is the most equitable approach," said Kleckner. "Everyone shares and no group is singled out for excessive cuts."
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/CONTACT: Dave Lane, 202-484-3610, or Mace Thornton, 312-399-5755, both of the American Farm Bureau Federation/